WASHINGTON – Four leaders of the Senate Homeland Security and Governmental Affairs Committee (HSGAC) Thursday hailed the Fiscal Year 2010 Department of Defense authorization conference report for containing several provisions to ensure that federal retirement system participants are treated fairly.

Committee Chairman Joe Lieberman, ID-Conn., and Ranking Member Susan Collins, R-Me., along with Subcommittee on Oversight of Government Management, the Federal Workforce, and the District of Columbia Chairman Daniel Akaka, D-Hawaii, and Ranking Member George Voinovich, R-Ohio, said these provisions will help agencies rehire experienced employees just as the federal government prepares to lose one-third of its civil service workforce over the next five years.

“A number of provisions in the DoD authorization conference agreement would bring justice to federal employees who – because of quirks in the law, errors, and oversight – have lost out on retirement benefits for which they would otherwise be eligible,” Lieberman said. “Federal employees are a dedicated group of people who are asked to make a number of sacrifices for the sake of their country. These provisions will ensure justice for hundreds of thousands of public servants.”

Collins said: “I am delighted that this legislation includes our provision that would provide federal agencies with the needed flexibility to bring retirees’ experience back into the federal workforce for a limited time. Nearly 5,400 federal retirees have returned to work on a full-time basis—demonstrating the importance of these experience employees to federal operations. This is vital as the federal government loses many of its skilled, experienced, senior employees.”

Akaka said: “I am pleased my fellow Armed Services conferees agreed to include critical retirement equity provisions in the NDAA. In particular, this bill will correct a long-standing inequity in retirement pay between Federal workers in Hawaii, Alaska, and the Territories and their mainland counterparts. These employees would have begun losing pay this year if Congress did not act. I am also pleased that the NDAA will end the shortsighted NSPS policy which threatened the rights and protections of the DoD civilian workforce.”

The provisions – three of which were reported out of HSGAC as stand-alone legislation and all of which are similar to provisions included in unsuccessful Senate amendments to the Family Smoking Prevention and Tobacco Control Act in June and to the National Defense Authorization Act in July – would:

    • Replace the cost of living increases that federal employees in Hawaii, Alaska, and U.S. territories receive with locality pay that federal employees in the contiguous 48 states receive. COLAS are neither taxed nor applied toward retirement benefits. Locality pay is taxed and applies to retirement. This provision was approved by HSGAC as S.507
    • Allow federal employees participating in the Federal Employee Retirement System (FERS) to apply their unused sick leave to their length of service for the purposes of computing the amount of retirement benefit. Federal employees under the older Civil Service Retirement System (CSRS) are already allowed to do so. This would bring equity to the two groups of employees and help reduce the absenteeism that results from the current “use it or lose it” FERS policy.
    • Correct an injustice in calculating the retirement benefits and dates for non-judicial employees of the D.C. courts system. When these employees were converted to federal employees in the late 1990s, they had to start over in accumulating eligibility for retirement and retirement benefits. The provision would direct that the time served before these employees became federal employees counts towards their federal retirement eligibility.
    • Allow former federal employees under the FERS who withdrew their contributions to the retirement trust fund, thereby waiving retirement credit for those years of service, to redeposit their earlier contributions, plus interest, upon reemployment with the federal government.
    • Remove a retirement penalty that is imposed on long-time federal employees who choose to switch to part-time work at the end of their careers. The retirement annuity for these employees is determined based on the amount of salary they receive, which drops when they switch to part-time work. This leaves employees with little incentive to stay in a part-time role and many retire. The provision would direct annuities for these employees to be determined using the rate of salary, not the amount. This provision was approved by HSGAC as S.469.
    • Authorize federal agencies to reemploy retired federal employees under certain limited conditions, without offset of an employees’ annuity against their salary, and requires the Comptroller General to report on the use of this authority. This provision was approved by HSGAC as S.629.

The DoD conference report must still be approved by both the House and Senate and signed by the President.